It Feels Impossible To Get Rid of Your Student Loans – Here’s What to Do About It
The student loan crisis continues to be a huge topic of discussion for Americans with the massive pile of educational debt. This week, President Joe Biden announced his long-awaited plan to forgive up to $10,000 in federal student loans for millions of borrowers. The plan will focus on borrows who make less than $125,000 (individuals) or $250,000 (families) a year. An additional $10,000 will be rewarded to borrowers who were recipients of Pell Grants.
Live Richer Podcast: How To Get Rid of Your Student Loan Debt
Read More: How Can I Apply For Federal Student Loan Forgiveness?
The department said on Wednesday that close to eight million borrowers could be eligible for this relief. In addition to this decision, President Biden also chose to continue to the COVID-19 emergency pause on payments, interest, and collections for student loans until December 31, 2022.
On episode six of my podcast the “Live Richer” my guests George Kamel and Kristina Ellis from the Ramsey Solutions team, share tips on how to tackle outstanding student loan debt and scoring scholarships for college. Americans owe about $1.75 trillion in student loan debt as of August 2022– more than credit and auto loan debt, according to the Federal Reserve.
Millions of student loan borrowers are set to resume student loan repayment in 2023 after two years of loan repayment pauses. Whether you have a student loan and you don’t know how to pay it back, or if you’re thinking about going to college and you don’t know how to pay for it, or maybe you’re a parent and your child wants to go to school and you don’t know how you’re going to help them financially, you’ll definitely want to tune in.
George discussed some common misconceptions about debt too, saying that Ramsey Solutions did a research study recently and we found that four out of 10 people don’t even think student loans are debt.
“You’ve probably heard that one before, well, student loans are good debt, right? Because it sets me up for my future. And look where we are now, $1.7 trillion in student loan debt. People can’t get homes, they don’t want to get married, they can’t have kids because they feel so financially stricken with this debt,” George told me.
After winning $500K in scholarships to fund her bachelor’s and a master’s degree, Kristina gives tips on how to score scholarships and grants to earn a debt-free education.
One of the great recommendations Kristina gave, is for students “to apply for a ton of scholarships because it’s a numbers game,” and they can look at scholarship databases such as Scholly and BigFuture.
Another important point she raised is that you can apply all throughout college.
“And it’s crazy, actually, millions of dollars in scholarships go unclaimed each year. So make sure you’re doing the research and seeing what’s out there because there is money out there and it’s important. Somebody is going to get that money, it might as well be you,” Kristina told me.
Now, if you have student debt, George said that you need to make a plan “because waiting 10 years for the hope of your student loans to get paid off is not a great game plan. I want you to get your life back a lot sooner than that,” whether that’s looking into some relief programs, refinancing, or getting on payment plans with your student loan servicer.
“But you’ve got to be proactive in communicating and letting them know what you can pay, otherwise you can get in some really sticky situations, because student loans are one of the hardest things to get rid of,” George told me.
George and Kristina also discussed Ramsey Solutions’ first documentary, “Borrowed Future: How Student Loans Are Killing the American Dream,” which uncovers the dark side of the student loan industry, exposes how it’s built to work against the 45 million Americans currently in debt for their education, and shows that it’s possible to beat the student loan system.
More From GOBankingRates
- Dollar Tree: 5 High-Quality Items To Buy Now
- Do You Have a Tax Question? Ask a Tax Pro
- The 10 Best Cash Back Credit Cards for 2023
- 6 Reasons Why You Shouldn't Procrastinate on Your Taxes
Amen Oyiboke-Osifo contributed to this article.